3 Top Democratic Lawmakers Demand Investigation Into Student Loan Company For Mishandling Loan Forgiveness For Millions Of Borrowers

Aiexpress  –  Three prominent Democratic lawmakers are calling for an investigation into a major student loan company by federal and state officials.

On Wednesday, Senate Majority Leader Chuck Schumer, along with Senators Elizabeth Warren and Bernie Sanders, issued a statement urging the Consumer Financial Protection Bureau and state attorneys general to conduct an investigation into the alleged mishandling of student loan forgiveness by MOHELA. MOHELA, which is a federal servicer based in Missouri and responsible for managing the Public Service Loan Forgiveness portfolio, is the subject of concern regarding its management practices.

According to a report released on Wednesday by the Student Borrower Protection Center and the American Federation of Teachers, internal documents obtained through Missouri’s Sunshine Law have shed light on the internal communications of MOHELA regarding its return to repayment playbook. These documents also provide insights into how the company advises its customer service representatives to interact with borrowers.

Lawmakers have expressed their outrage at MOHELA’s mismanagement of their student loan portfolio, which resulted in denied services to millions of hardworking borrowers. The playbook employed by MOHELA included “call deflection” strategies, making it challenging for borrowers with questions to reach a representative. These tactics hindered borrowers’ ability to seek assistance and resolution. The lawmakers have joined advocacy groups in condemning MOHELA’s actions and demanding accountability for the detrimental impact on borrowers.

The CFPB and attorneys general were urged to investigate MOHELA and take action to the fullest extent possible under the law. It was emphasized that our nation’s public servants, members of the military, and first responders deserve much better.


Federal servicers have faced scrutiny over their handling of the return to student loan repayment since October, when payments resumed after a pause of over three years.

In October, the Education Department made an announcement that it would withhold more than $7 million in pay from MOHELA. This decision was made due to MOHELA’s failure to provide borrowers with timely billing statements. As a result, borrowers faced various issues with their bills, such as receiving inaccurate monthly statements and being assigned incorrect forbearance statuses.

In January, the Education Department withheld different amounts of pay from the other three federal servicers for the same reason.

Lawmakers have been urging for more oversight, with Senator Warren and three other Democratic colleagues sending a letter to MOHELA’s CEO in November. The letter expressed concerns about the lack of clarity in the company’s billing communications to borrowers.

The Education Department made a commitment to maintain oversight over federal servicers. In late 2019, they introduced an accountability framework that outlines the possible actions they can take if a servicer fails to fulfill its contractual obligations. For instance, they have the authority to transfer a borrower to a servicer that has a better track record.

The company’s status regarding a potential investigation by the CFPB remains uncertain as the bureau has yet to provide any official comments on the matter.

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